Thursday, August 21, 2014
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Athabasca Chipewyan First Nation makes the best of oil money

With $250M in revenues, First Nation sets up a trust to gain independence

By Angela Sterritt, CBC News

Tucked away in the Wood Buffalo region in northern Alberta, Fort Chipewyan rests at the western tip of Lake Athabasca.

Just downstream from the Alberta oilsands, the tiny northern community has faced off with an insurmountable and ever-expanding oil industry for over three decades.

But leaders with the Athabasca Chipewyan First Nation (ACFN) say they aren't letting big oil run their lives or ruin their traditional way of life.

Instead, they’re taking matters — and money — into their own hands.

“Forty years ago it was trapping, and that livelihood was stripped, so now people are left trying to find other ways to put food on the table,” said Athabasca Dene youth leader Mike Mercredi, from his home in Fort Chipewyan.

“But if we are not focusing on the culture and way of life, then you might as well say we are ghosts; We are dead. I am not going to allow that while I am alive.”

Mercredi once worked for a large oilsands company, then battled against the industry, campaigning for closure of the oilsands. But now he’s looking for constructive solutions — ways for his people to live without sole dependency on the oil and gas industry.

“It’s finding ways to blend culture and traditional and Western teachings. It’s time for these things to happen now because our way of life is disappearing along with this resource,” he said.

The 38-year old recently started a youth and elder program called the Experiential Learning Initiative. His project uses the land, elders and the classroom to teach traditional skills to the community's high school students.

But one of the few funding options for the project was from the industry. Federal funding is sparse these days and often characterized by micro-management, according to some First Nations leaders.

Mercredi says six large oil companies have given funding to his project, through a fund allocated for youth and community programs in Fort Chipewyan.

It’s one example of the many complexities present in a community struggling in a rapidly changing world.

But the ACFN is not about to sit on the sidelines and watch. It's looking to set up its own community funds.

No federal funding

The Athabasca Chipewyan First Nation is one of the only First Nations in Canada to refuse federal funding under a contribution agreement — funds that must be spent according to agreed-upon conditions, monitored and reviewed by Ottawa.

“We refuse to take funding from the federal government because of the laws and everything that comes with it,” Chief Allan Adam said from his office in Fort Chipewyan.

Adam said Ottawa recently enacted a clause in the band's contribution agreement that said First Nations must adhere to the numerous omnibus bills, some affecting the protection of water, that were tabled in 2012.

“This is our second year of not taking money from the federal government. We are one year ahead of everybody — we knew we could survive, and we are still pursuing and moving ahead,” he said.

The ACFN has 17 businesses through its group of companies called Acden, which is short for Athabasca Chipewyan Denesoline.

“Our nation is looking at becoming a full sovereign nation in Canada,” said ACFN representative Eriel Deranger. “Our business enterprises range from janitorial, catering [to] environmental and consulting firms.”

Many of the contracts through Acden are related to the oilsands sector and are joint ventures with some of the largest players in industry.

“Yes, we are receiving money from industry, from contracts with them, but we are not in there saying, ‘Dig, drill, baby, drill.' We are providing services from multiple sectors,” said Deranger.

Acden says it makes about $250 million a year in revenues, but the profits that come back to the band are slim. So the ACFN recently started discussing other ideas to ensure prosperity for its future generations.

Setting up a trust for more self-sufficiency

The ACFN, unlike the Alberta government, doesn't get royalties or have access to tax revenue sharing. But the band has negotiated Impact and Benefit Agreements, or IBAs.

In the Canadian mining sector, IBAs are described by the companies as a way to minimize the negative impacts of mining projects and to ensure local benefits. They are often binding agreements between companies and communities.

In the 1990s, the agreements negotiated by ACFN and oil companies came in the form of employment opportunities and contracts through Acden. But under the new leadership of Allan Adam, the band eyed something more.

In 2011 an IBA, similar to those signed in other provinces, was signed with the oil company Total promising a modest but steady cash flow. Band employees call it the Community Sustainability Fund.

The ACFN now has its sights set on agreements with Suncor, Esso Kearl Lake, Dover-Brion, Cenovus, Husky, Syncrude and others.

To take the prospect of self-sufficiency one step further, the band recently hatched the idea of a trust to ensure IBAs would be beneficial to future generations.

The intention, according to the band, is to have the trust hold most or all of the money from IBAs, profits from Acden, and money from successful treaty entitlement claims.

Capital would grow over the years and the trustees would invest capital and distribute proceeds under their own community sustainability fund. The money could then go toward projects associated with health, social development, housing and culture.

Today the trust is at a draft stage, not yet presented to electors for ratification. But if it goes ahead, it’s one step closer to independence.

According to band employee John Rigney, chief and council are trying to get the new trust in place as quickly as possible. He said some think it will be operation by June.

"When the trust is operating, the intent is to flow about half ACFN’s share of corporate profits directly into the trust and flow about half to the ACFN government," Rigeny said in an email.

"The trust will also collect more than half the proceeds of the various Impact Benefit Agreements now being negotiated. The goal is that the trust will be valued at least $200 million in 20 years."

The complicated relationship

The million-dollar question is how a community with deep concerns about the oilsands can rationalize these relationships.

"We have to consider stepping stones...we have to make the best of situations that are not always ideal," said Eriel Deranger.

"We are really trying to create a sovereign nation that is not just independent in its community but that is creating employment and equity and recognition of the very rights of who we are as indigenous peoples, and it's not going to be just flicking on a light and everything changes. Things have to happen incrementally", she said.

While the present task is finding ways to thrive economically, culturally, environmentally and physically, the next generation is top of mind for Mercredi.

“A lot of the industry and government people don't think in 100 years. They only think in four years of their terms," Mercredi said.

“But our elders teach us not to think like that. They teach us to think 150 years from now … or 200 years down the line.”

The students in Mercredi's Experiential Learning Initiative will trap along a line donated to the project by Dene elder Charlie Voyageur, as well as hunt, fish and gather medicines.

Mercredi says trapping and hunting as a source of income is just as important as teaching young adults about their identity as Dene people.

The pilot project will last a year, and Mercredi hopes the participants will think about how to live without oilsands money.

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